Holding deposits are excluded from the upcoming letting fees ban, says Housing Minister Alok Sharma.
In a recent House of Commons debate, he confirmed draft legislation is nearly ready but the deposits will not form part of the new rules.
The minister also revealed he would set up a ‘lead body’ to enforce the ban and that all letting agents would have to offer a client money protection scheme.
Other new facets of the legislation would also cover a central register of landlords for the UK and a national rental standard, although he did not disclose any details of his plans.
He told MPs that his staff were sifting through almost 5,000 replies to a recent consultation over the fees ban, but he had decided the ban will result in a “more competitive, affordable and transparent lettings market” and that evidence from a similar ban in Scotland showed the ban “won’t have the negative consequences people have suggested it would”.
The minister also felt the ban would not see rents rise, so a rental cap demanded by some would not offer an alternative.
His general view was letting fees charged by landlords and agents were unfair on tenants as they could not choose which business to deal with and had to pay the fees without any alternative of a cheaper option.
“A landlord is better placed to pay reference and credit check fees and anyway it is they who ask for the checks to be completed, not the tenant,” said Sharma.
“Many letting agents are concerned that some tenants withdraw from a tenancy before paying a deposit despite referencing having been completed, which this will prevent.
“This will also prevent tenants registering to rent multiple properties.”